Inflation in Honduras

Honduras - Inflation

The economy appeared to lose momentum in the second quarter. Growth in the index of economic activity averaged a mere 2.0%, moderating notably from Q1. In particular, the agriculture, manufacturing and retail sectors sagged compared to the first quarter. Moreover, June’s economic activity reading fell to an over four-year low, likely weighed on by widespread protests. However, healthy remittances should have propped up private consumption. This comes after robust growth in Q1, which was driven by the financial sector. In July, the IMF approved USD 311 million in funding to support the government’s reform agenda, which should boost business confidence. The Fund also encouraged the government to enhance the Central Bank’s autonomy and increase revenue mobilization.

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